Beer tie facing further competition scrutiny
Pubcos could be forced to defend the competitiveness of the beer tie again, after the government said it was in favour of scrapping an order which excludes the tie from a part of UK competition laws.
The Department for Business, Innovation & Skills (BIS) yesterday launched a public consultation on the Land Agreements Exclusion Order, which means the competitiveness of the beer tie cannot be looked at under the Competition Act.
CAMRA claims this will make it easier for the Office of Fair Trading to look at its beer tie super-complaint.
Under the Competition Act, anti-competitive land agreements are prohibited. In this respect, the beer tie is classed as a land agreement.
If the order is scrapped it could also mean an end to restrictive covenants.
Jonathan Mail, CAMRA's head of policy and public affairs, said: "Revocation of the this order is likely to mean an end to restrictive covenants being used to prevent closed pubs reopening and will put pressure on pub owning companies to clearly show that their beer tie agreements are not anti-competitive.
"We hope this will lead to reform which will improve the position of "tied" pub businesses and therefore the consumer.
"This announcement will make it easier for the UK competition authorities to consider CAMRA's super-complaint which expresses concern at consumer detriment caused by the excessive pub rents and high beer prices charged to many "tied" pub businesses."
In the consultation, BIS indicated out of three options, the governments' preferred choice was to scrap the order. The other options are make no changes, or amend the order.
The consultation states: "The government is committed to competition as an essential characteristic of fair and open markets, driving productivity which brings benefits for both businesses and consumers.
"Competition law should therefore apply widely across the economy and any exceptions should require clear justification."
The consultation closes on November 4.
A response form is available at: www.berr.gov.uk/files/file52384.pdf
